The Hindu Business Line : Tata Chem looks to renew focus on agri sector

Mumbai, July 27 Tata Chemicals plans to renew its focus on the agriculture sector, especially on the fresh produce business (Khet-Se), for which it recently joined hands with an Irish company called Total Produce.

Speaking at the AGM of Tata Chemicals, Mr Rata Tata, Chairman, said: “We have plans to set up two distribution centres for fresh farm produce in 2007-08.”

These centres will buy produce from farmers and process and pack it for retail chains.

The number of distribution centres will be increased to 20 in three years and to 40 by the next five years, he added.

The fresh produce business in India is estimated to be worth Rs 1,60,000 crore, of which 40 per cent is reportedly wasted for want of cold chain and distribution network.

Tata Chemicals will focus on reducing the wastage by providing processing and cold storage facilities.

On the decision, Mr Vijay Jawandiya of Shetkari Sangathan said: “About 80 per cent of the price realisation of farm produce goes to middlemen.”

He added: “If the Tatas can reverse this trend, it would be welcome.”

However, Mr Gurudas Dasgupta, General Secretary of the All-India Trade Union Congress (AITUC), said that there is no “economic logic” to the decision.

“It would do Tata Chemicals well if they concentrated on setting up more chemical plants rather than getting half way into retailing.”

Net up, sales down

Meanwhile, the company has reported 61 per cent rise in net profit to Rs 121 crore for the first quarter ended June, against Rs 75 crore in the corresponding previous period.

However, net sales dropped 11.36 per cent to Rs 669 crore (Rs 755 crore).

Total income was also down 10.40 per cent to Rs 681 crore (Rs 760 crore).

The company has made a notional gain of Rs 37.88 crore in foreign exchange due to the rupee’s appreciation against the dollar.

On a consolidated basis, the company’s net profit grew 55.03 per cent to Rs 196 crore (Rs 128 crore).

However, net sales were down to Rs 1,134 crore (Rs 1,211 crore).

Operating profit improved to Rs 248 crore (Rs 218 crore).

This was mainly due to a 10 per cent drop in expenditure to Rs 885 crore (Rs 992 crore).

On the BSE on Friday, the company’s shares fell 2.74 per cent to Rs 250.

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